Rentech: Challenges continue in second quarter

By Erin Voegele | August 11, 2017

On Aug. 10, Rentech released second quarter financial results, reporting the quarter continued to be challenging. During an investor call, Keith Forman, president and CEO of Rentech, cited soft demand for retail wood pellets and lower industrial pellet sales among the factors contributing to lower revenues for the quarter. He also briefly discussed the idling of the company’s Wawa, Ontario, pellet mill and reduced operating rates at the Atikokan plant.

Forman noted the company shipped approximately 11,000 metric tons of pellets to Ontario Power Generation during the second quarter, with 12,000 metric tons shipped to Drax. He also indicated the company negotiating with Drax to cancel the remaining shipments for this year.

Rentech reported consolidated revenues from continuing operations of $24.7 million, down from $31.8 million during the same period of last year. Gross loss was $700,000, compared to a gross loss of $1.7 million during the same period of last year. Net loss attributable to Rentech common shareholders was $37.1 million, or $1.60 per share, compared to a net income attributable to Rentech shareholders of $285 million, or $12.5 per basic share, during the second quarter of 2016.

Revenues for the New England Wood Pellet division were $4 million, earned by delivering approximately 22,000 tons of wood pellets. During the same period of last year, revenues reached $4.4 million, earned by delivering 24,000 tons of wood pellets. Gross loss for the division was $400,000, compared to a gross profit of $600,000 during the second quarter of 2016. Net loss was $1.2 million, compared to a net loss of $300,000 during the same quarter of last year.

The industrial wood pellet division reported revenues of $3.2 million, earned by delivering approximately 23,000 metric tons of wood pellets. Revenues for the same period of last year were $6.5 million, earned by delivering approximately 56,000 metric tons of wood pellets. Net loss was $3.2 million, compared to a net loss of $7 million during the same three-month period of last year.